Who took the survey?
The BOI survey was distributed using a mailing list compiled at industry meetings and from Berkeley's BOI industry partners.
Although the number of usable responses varies from question to question, surveys were at least partially completed. Forty-six
percent of respondents work at biotech/biopharm firms, and an additional 24% work at pharmaceutical firms. The bulk of the
remaining respondents identify themselves as equipment or raw-material suppliers, or as employees of contract organizations.
Twenty-five percent of the respondents work at large companies (more than 50,000 employees), 20% work at very small firms
(less than 100 employees), and the rest are distributed somewhere between those two extremes. Slightly less than one quarter
of respondents' firms have no products on the market, while slightly less than half have 20 or more products on the market.
In terms of annual sales, respondents also come from a broad spectrum of companies—35% are from large companies with $5 billion
or more in annual sales, and the rest of the respondents are relatively equally distributed over the range from no annual
sales to $5 billion in annual sales. Respondents' firms operate globally, with sales and manufacturing distributed around
the world, and R&D most often concentrated on the US East and West Coasts, and in Western Europe.
About 30% of survey respondents work in R&D, and 20% work in manufacturing; the rest are scattered throughout various roles
in engineering, quality, planning, and so forth. About half are managers or directors; the rest are either consultants, or
in various roles ranging from the C-suite to independent contractors. Note that the BOI team made no attempt to limit responses
from a particular firm, so that the results reflect the opinions of multiple respondents within a firm.
Figure 4: Respondents rank how frequent key risks become an issue.
Overall view of risk
Overall, respondents are most concerned with the risks surrounding manufacturing reliability and production contamination,
followed by raw-material supply and outsourcing risk. Forecast errors, catastrophic natural events, regulatory risk, and IP
theft ranked further behind, although all are of concern to respondents (see Figure 1). Interestingly, given risk concerns and the inherent uncertainty in this industry, relatively few respondents rely on quantitative
modeling tools to assess risk: 72% or respondents firms use failure mode and effects analysis (FMEA) of risk, but fewer than
30% use discrete event modeling, and fewer than 27% use Monte–Carlo analysis, tools that are standard in other industries.
Indeed, while 70% of respondents monitor batches lost and on-time performance, half or fewer monitor safety stock levels or
customer-service level, although these are key performance indicators that are useful for measuring the cost and effectiveness
of risk mitigation strategies.
Of all of the raw-material related risks, single-sourcing stands as the most significant, followed by contamination (other
concerns included availability, comparability across vendors, extractables and leachables, and price fluctuations). These
results are in spite of the fact that that only 37% of respondents indicate that their firms use multiple suppliers or similar
strategies to mitigate the risk, although some responding firms are beginning to identify diversified sourcing as a key goal
in the product-development stage. In addition to dual sourcing, firms turn to vendor audits, quality management systems, and
large safety stocks of material in order to mitigate these risks. One respondent talked of abandoning a "just-in-time" strategy
due to the associated risk. Not surprisingly, inventory costs and inventory levels are the key metrics tracked to assess raw-material
acquisition performance (by 58% and 54% of respondents, respectively). Surprisingly, fewer than 15% of respondents explicitly
mention tracking quality metrics in this context. In addition, about half of the respondents mention focusing on tracking
the fraction of single-sourced raw materials. When determining the appropriate inventory-management policies, a surprisingly
large fraction of respondents (40%) of respondents do not use quantitative or scientific approaches. Slightly over half rely
on optimization tools to make these decisions, and about 15% (possibly overlapping with the optimization users) also use simulation
tools (see Figure 2).
Figure 5: Respondents indicate their level of concern about certain contract-manufacturing risks, where the scale ranges from
1 to 5, with 1 meaning not concerned, 3 meaning concerned, and 5 meaning extremely concerned.
The most significant manufacturing-related risk as identified by respondents was contamination, followed in decreasing order
by human resources issues, and yield variability. Respondents were also concerned with increasing titers, but seemed less
concerned with the challenges posed by disposables (see section below). Respondents also identified a variety of other concerns
surrounding product validation, equipment reliability, and managing capacity. Securing sufficient supply and was also noted
among the respondents' comments (see Figure 3).
Four primary strategies are used to mitigate risks including training, statistical analysis, quality management techniques,
and a focus on improving both internal and external communication. About 40% of respondents identify training and education
as a key manufacturing risk-reduction tool, while more than 30% identify statistical analysis and quality management. Moreover,
respondents repeatedly highlight the positive impact of good communications both internally and with CMOs and suppliers on
When addressed specifically, manufacturing contamination was reported to be a primary concern of 64% of the respondents (see
Figure 6: Respondents indicate how well they explicitly model demand variability in their planning processes.
Of the various issues and concerns surrounding contamination, media contamination is by far the largest concern: 39% of respondents
identified this as their most significant contamination-related concern. Cross-batch contamination was a distant second at
19% (followed by lack of detectability of contamination, and extractables and leachables). To address these concerns, respondents
report primarily turning to high-temperature/short-time (HTST) pasteurization, physical segregation, and better assay technologies
at roughly equivalent levels (each by between 45% and 47% of respondents). About 60% report experiencing a contamination event
once or more a year, and roughly 14% experience such an event once a month or more frequently (see Figure 4).